Bankrupt FTX Faces Criminal Investigation in the Bahamas

Financial police in the Bahamas, where Sam Bankman-Fried's FTX is headquartered, are working with the local securities regulator to investigate if any criminal conduct has occurred.

AccessTimeIconNov 13, 2022 at 6:44 p.m. UTC
Updated Nov 14, 2022 at 6:01 p.m. UTC

Law enforcement in the Bahamas are investigating Sam Bankman-Fried's crypto exchange FTX following the platform's swift collapse and bankruptcy filing last week.

A team at the jurisdiction's Financial Crimes Investigation Branch are "working closely" with the Bahamas Securities Commission to investigate if any criminal misconduct occurred, an official notice on Sunday said.

The Securities Commission of the Bahamas had already suspended FTX’s registration and ordered assets tied to the exchange frozen on Thursday.

The once multi-billion dollar cryptocurrency enterprise, which was headquartered in the Bahamas, started unraveling after a CoinDesk article questioning the financials of FTX's sister company Alameda Research led to a liquidity crunch in early November. On Tuesday, rival exchange Binance was looking to buy the embattled FTX before the deal was scrapped – the exchange is now seeking protection from bankruptcy in the U.S.

Financial regulators in the Bahamas have been watching the proceedings closely. When FTX admitted it had allowed some Bahamian customers to withdraw funds from the exchange citing local regulatory requirements, the Securities Commission issued a statement saying it had not directed the exchange to reinstate withdrawals.

FTX is also under investigation by the U.S. Securities and Exchange Commission and the Justice Department.


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Sandali Handagama

Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She does not own any crypto.